Artist rendering of PACCAR's $400 million engine plant in Columbus, Miss. North Mississippi

The Next Great By Michael C. Randle Automotive Region in the Southern Auto Corridor

he Southern Automotive Corridor (www.- one that sits directly on I-65 in Montgomery, Ala. -- helped solid- SouthernAutoCorridor.com) continues to make a ify that Interstate as the center of this incredibly fast-growing huge name for itself. Not unlike Silicon Valley automotive manufacturing region. But the center of the Corridor and Wall Street, the Southern Auto Corridor has keeps widening in both directions. earned a marquee that is featured somewhere in Japanese carmaker and South Korea-based Kia the international media virtually every week. Motors recently made decisions to cozy up somewhat close to You cannot find a state in the South that has what we call the spine of the Southern Automotive Corridor, not benefited from the growth of the auto indus- which, again, is Interstate 65. Toyota is currently grading its try. Florida sees the least amount of activity, but 2,000-plus-acre site near Tupelo, Miss., and Kia is building its even the Sunshine State can't help from landing new plant in West Point, Ga., near the Alabama-Georgia border. some kind of automotive project from time to time, as evidenced by a large distribution deal announced by Bridgestone in the sum- The South's is Huge Tmer quarter in Jacksonville. and It Simply Will not Stop Growing Alabama has been the industry's darling of late. Yet, Contrary to what you may believe, the U.S. automotive Mississippi, Tennessee, Kentucky, the Carolinas, Georgia, industry is, by a wide margin, the largest in the world, or about Missouri, Kansas, Virginia, Louisiana, Texas, Arkansas and other three times the size of the second-largest country in vehicle sales, states in the South record deals from the transportation equip- which is Japan. According to the Center for Automotive ment sector each and every month. Research, based in Michigan, no other single industry is linked to Our records indicate that annually the automotive industry as much of U.S. manufacturing or generates as much retail busi- has accounted for almost double the number of large projects ness and employment. announced in the South when compared to all other single indus- Considering the fact that the Southern Auto Corridor is the try sectors so far this decade, not counting retail, of course. only place in North America, much less the U.S., where the auto- Financial services, headquarter operations, call centers, distribu- motive industry is currently growing on a net basis, makes the tion and warehousing and now, the oil and gas industry, try to sector so important to the future of the South's economy. keep up with the auto industry in this region. But, they give way While there are several heavy and medium plants oper- every year to what amounts to a 300 pound industrial gorilla that ating in the region, including Peterbilt and Freightliner, most of simply moves around the South as it pleases. the attention given the transportation equipment industry in the The center of the Southern Auto Corridor has not always South focuses like a laser on major light truck and assembly been Interstate 65, as it snakes its way in the South from Mobile, facilities. That focus specifically is on foreign-based automotive Ala., all the way through Louisville, Ky. But that spine was cre- plants such as those operated by Honda, Toyota, BMW, ated in the 1980s when foreign automakers chose Kentucky and Mercedes-Benz, Nissan, Hyundai and Kia. Of course, GM, Ford Tennessee for huge assembly plants. and Chrysler have operated auto works in the South for decades. Interstate 65 continues to remain the center, mostly because Currently there are 20 major automotive assembly plants of three vehicle assembly plants built in Alabama by Mercedes- building , light , SUVs and in the Southern Benz in the late 1990s and Honda earlier this decade. Also, a Auto Corridor. Of those, three are closing soon, according to large facility completed by Hyundai more than two years ago -- announcements made earlier in the year by domestic automakers.

68 | Summer 2007 | Southern Business & Development Circle #71 on Reader Response Card.

Circle #100 on Reader Response Card. North Mississippi There are two major assembly plants now facilities in the Midwest than they do in the expand in huge increments that include under construction, the aforementioned Kia South. More of those facilities have closed hundreds of millions of dollars in invest- facility in West Point, Ga., and Toyota in there, than here. ments and thousands of new jobs. Those Blue Springs, Miss., located near Tupelo. It Foreign automakers, on the other are in addition to the couple of thousand should also be noted that in the last three hand, prefer the South as their region of they started with on average per plant when years domestic automakers have closed three choice when it comes to the largest auto- they opened for production. assembly plants: Ford in Atlanta, GM in motive market in the world. That never Oklahoma City and GM in Baltimore. Those change for several reasons. The Japanese, The Economic Effects are Massive three have been struck off the list, so they are the Germans, the Koreans, they have Today, we estimate that at just the 20 not included in the 20 operating today in the learned from the mistakes made by General assembly plants that are operating in the region, nor are the two being built. Motors, Ford and Chrysler. Soon, the South today there are 55,800 jobs/people, So, using simple math, you could Chinese will get their act together and land housed at those plants. You can get all argue that the South's automotive industry their facilities in the Southern Automotive kinds of scenarios from economists and has not grown on a net basis, since there Corridor, as well. other experts regarding indirect employ- were 23 major auto assembly plants in the Foreign automakers have learned that ment as a result of those 20 auto assembly region three years ago, there are 20 today, the South is the best place in the largest plants that currently operate in the South. three of which are about to close and two automotive market in the world to compete But it's our educated guess that it's about are under construction. That's a reduction and they are setting up shop here with a eight to 10 times that number and that's just from 23 to 19, if you factor in those that are clean slate. While foreign automakers start from suppliers, the few R&D jobs that are about to close and those that are being built. here fresh, the domestics are dealing with a currently here and a growing number of "slate" that continues to be filled with all white-collar jobs that have located in the The Foreign Yin and Yang kinds of issues that deal with one thing: the Southern Auto Corridor, employed by both Without question, the primary reason high-cost of operating their facilities in automakers and suppliers. Remember, the Southern Automotive Corridor is their own country. Nissan relocated it's North American head- indeed growing, something that isn't hap- Most of the foreign auto plants in the quarters to the Nashville metro from pening in the transportation equipment sec- South continue to expand at rapid rates. California in 2006. tor anywhere else in North America, is That's where the growth is in the region. We won't even begin to count all of the because the new is replacing the old. Foreign automakers build plants in the deeper indirect jobs, such as those created Domestic automakers have many more South and in just a few years, those plants by retail, housing, etc., as a result of the

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North Mississippi choosing Tupelo, is about as good as it can get for an automaker. We know Honda is on the hunt for a new assembly plant. We have learned that if Toyota had not picked Tupelo for its plant back in February, Honda was interested in that property. If Toyota was so interested in Chattanooga, and they were, then why wouldn't Honda be interested in the same site? If Honda chooses a site in or near the spine of the Southern Auto Corridor, such as Chattanooga, then the dynamics change again. That would create an even greater cluster near the spine, but more demand for labor and suppliers near the center of the SAC. But, that is just speculation, something that needs to be addressed at a later date.

Why we believe North Mississippi is the Next Great Automotive Region A photo not published, as far as we know, by any media source. Left to right, Dr. Shoichiro in the Southern Auto Corridor Toyoda, Mississippi Gov. Haley Barbour and Dr. Toyoda’s wife, Hiroko. The photo was taken short- West Georgia competed successfully ly after the announcement earlier this year that Toyota will build its latest U.S. assembly plant in for the giant Kia project in early 2006 after Blue Springs, Miss. Kia left the negotiating table in Mississippi in the fall of 2005. There is no question that South's automotive industry as a whole. grow in Alabama, expect the slew of new much of West Georgia will benefit greatly Those jobs could be a million, or several suppliers that have flocked to that state to from the new Kia assembly plant. In fact, million, in the South. Who knows? begin to slow in the coming years. Georgia had little choice but to turn the Kia Of those 55,800 assembly plant jobs, Tennessee's and Kentucky's automo- deal, regardless of the price tag the Peach about 33,000 are housed in eight foreign tive sectors are more mature than State will pay in incentives to the Korean assembly plants. Of course, Kia and the Alabama's. The Bluegrass and Volunteer automaker. Why? In the same quarter that new Toyota plant in Northeast Mississippi states feature the spine (Interstate 65) of the Kia announced its intentions to build a will add, initially, another 5,000 or there- SAC running right through the center of abouts to that total. So, the economic both. Yet, there hasn't been a new assembly huge facility in Georgia, GM and Ford effects of the automotive industry in the plant announcement – there have been announced they were closing their Atlanta- South are massive and continue to grow. many expansions of existing assembly area plants that had been operating there plants and new engine plant deals in both for decades. Georgia had a chance to No Room at the Inn. Maturation is states – in over 15 years in Kentucky or rebuild its automotive industry at the same Occurring in Three Critical States Tennessee. So, Alabama's automotive time it was being lost. What better timing industry is apparently moving in the direc- could there ever be? As mentioned, Alabama has been the But in Kia's case, it's the pup in the latest hot spot for the automotive industry tion of Tennessee's and Kentucky's. It is Korean conglomerate that is indeed in the Southern Automotive Corridor maturing. It is getting smarter. This also Hyundai. The pup could not venture far (SAC). The automotive industry will con- means that like life itself, the auto industry from the mom, and the mom, which is tinue to grow in Alabama, but not like it has in those three states is slowing down after in the recent past. In Alabama, there's just years of furious growth. Hyundai, has its U.S. operations in no room left in the Inn, so to speak. Again, that does not mean auto-related Montgomery, Ala., a location that is less Alabama's unemployment rate has been in deals with stop in Kentucky, Tennessee and than 90 miles from West Point, Ga., the site the low 3 percent range for quite some Alabama. Operating in those three states is of the new Kia operation. time. It will be difficult, in our opinion, for a must for so many companies involved in Virtually all of Hyundai's parts suppli- that state to even deliver adequate labor for the automotive industry. Deals will contin- ers are located throughout central-and- some of the massive deals it has turned in ue to be turned in the center of the Southern south Alabama. Many of those suppliers the last year or so, such as the BRAC situ- Auto Corridor. It's just our opinion that will also supply the Kia plant in Georgia, ation in Huntsville and the ThyssenKrupp "new deals" will not equal what they have since it is located nearby. That means that project north of Mobile. Yet, knowing been over the last two decades in those West Georgia will not land the number of Alabama's recent history, they will find a three states. Again, existing vehicle-related suppliers that a plant like Kia would typi- way and that way will most likely come companies will remain constant and even cally draw. from folks migrating to the state in an effort more will grow in those three states. But So, if our theory is correct -- that to find a better job and a better way of life. new deals won't be as prevalent. Georgia won't see as many parts suppliers So, the auto industry will undoubtedly as what is normally seen with a plant the slow in what has been the hottest state of The Chattanooga Factor size of Kia's, since many of those suppliers late. While existing suppliers of Korean From what we have learned, the site are already located in Alabama, and automakers, such as Kia and Hyundai, will Toyota looked at near Chattanooga, before Alabama, Tennessee and Kentucky's auto

72 | Summer 2007 | Southern Business & Development North Mississippi industry prospects may be maturing (slow- announced it would build an assembly Toyota plant to announce a new facility in ing to a degree) -- then where is the near- plant near Tupelo, Miss. This Toyota plant Mississippi. That plant, TABs first in the future growth going to be in the Southern will be set up differently than how the U.S., is expected to house over 400 work- Auto Corridor? Without question it is going Japanese automaker set up its pickup truck ers when completed in 2009. to be in Mississippi, specifically North plant in San Antonio. There, Toyota has There's a third huge automotive-relat- Mississippi. huge operations all in one location. There's ed player to call North Mississippi home. Since the beginning of the year, two the pickup truck plant in addition to over 20 SeverCorr, which will produce a variety of huge examples of that have occurred in suppliers "in the gate," or on site. steel grades and products, is attempting to North Mississippi. In May of this year, With Toyota's new Tupelo operation, produce automotive grade steel from steel Belleview, Wash.,-based PACCAR, an look for parts suppliers to be scattered all scrap. It's a technology never before imple- incredibly successful transportation equip- over North and Central Mississippi. That is mented. If SeverCorr is successful at pro- ment concern that builds engines and trucks a more traditional way to operate an assem- ducing automotive-grade steel at its new for a variety of nameplates, including bly plant and that's exactly what has plant near Columbus, Miss., then the region Peterbilt and Kenworth, announced it will already occurred. In late August, Toyota has another important automotive-related build a $400 million engine facility and Boshoku Corp., announced its plans to resource to draw from. technology center in the Columbus, Miss., build a new plant in Fulton, Miss. The It should also be noted that just north metro. The 400,000-square-foot facility is plant, which will make seats, door panels of Jackson, Miss., in the central part of the just now breaking ground and will be com- and carpet for the Highlander model SUV state, Nissan has been operating a four-line pleted in 2009. The new facility will manu- that will be assembled at the new Toyota auto assembly plant since 2002. So, with facture 12.9-liter and 9.2-liter diesel assembly plant, will house about 500 work- the addition of Toyota, Mississippi is the engines for Kenworth, Peterbilt and DAF ers. Fulton, is located in Itawamba County, only state in the Southern Auto Corridor to vehicles and complements PACCAR's or about 25 miles from the site of the new have two Japanese assembly plants. engine facility in the Netherlands. Toyota assembly facility. To conclude, in terms of activity in the And in July, Toyota Auto Body Southern Auto Corridor, watch what is And Then the Bomb Dropped announced it is building its first U.S. plant about to occur in Mississippi. There won't And then the bomb dropped in near Tupelo in Baldwyn, Miss. The $180 be a state in the entire South that will see February of 2007. Toyota, the prize of all million stamping, body weld and plastic more action from the automotive industry prizes in the automotive industry, parts plant, was the first supplier to the new in the next three to five years. �

Southern Business & Development | Summer 2007 | 73 North Mississippi Not Seeing Toyota’s Chief Site-Selection Exec Wasn’t a Waste of Time, After All By Sandy Jacobs asked our human resources people to do a The Toyota site near Tupelo as grading deep-dive on Tupelo. I told them there may was underway in August 2007. be something in Tupelo for us,” he recalls. When the researchers came back with their findings, they told him that the work force in the Tupelo area might be one of the best they’d ever seen. Northeast Mississippi has a long histo- ry of manufacturing employment and an unusually high percentage of its work force is still employed in factory jobs. Within a 60-mile radius of the Toyota plant site, about 32 percent of the people with jobs work in manufacturing. “That percentage surprised me,” Cuneo says. “It was greater than other areas Toyota was considering.” It was also a higher percentage than places where Toyota has productive U.S. assembly plants. On his visit, Cuneo also inspected the 1,730-acre TVA megasite that David Rumbarger expected to pitch at the can- celled New York City meeting. The site owed its existence to the Pontotoc, Union, Lee Alliance, a three-county partnership set up in 2001 to revive the area’s economy. Elected officials agreed to form the PUL cancelled meeting director Glenn McCullough Jr., a Tupelo Alliance (PUL) and to share equally the turned the tide in favor native, that got Cuneo to agree to the abort- costs and benefits of a badly needed, all-out of Tupelo, Miss., and ed New York meeting. economic-development program. started Toyota’s site “Glenn called me in April and said he Jobs in the area’s biggest industry, search on a course that and David Rumbarger (president, CEO of upholstered furniture production, had been led to Mississippi win- the Tupelo-area Community Development declining at an alarming clip all through the ning the new $1.3 bil- Foundation) wanted to come up to New 1990s, when some 8,000 furniture-related lion, 2,000-employee York and make a pitch.” They didn’t get to factory jobs vanished. An estimated 4,000, Highlander assembly pitch their site, but the cancelled appoint- or so, have gone in the ensuing years. plant. A last-minute ment resulted in something better. PUL’s marketing responsibility is in emergency forced Dennis Cuneo, the “Because I couldn’t meet with them,” the hands of Rumbarger, president and automaker’s lead site-search executive, to Cuneo says, “I promised I’d come to CEO of Tupelo’s Community Development disappointA the two men who’d flown to Tupelo in July.” He did, on July 17, 2006, Foundation (CDF), and the PUL Alliance’s New York in the hope of convincing him to and was taken to some of the area’s uphol- Executive Director Randy Kelley is in seriously consider the 1,730-acre, megasite stered-furniture factories and the Cooper charge of finance and administration. in northeast Mississippi. Tire & Rubber plant. He saw hardworking Kelley would later play a major part in the “At the time, Tupelo wasn’t even on people doing tough factory jobs, and heard acquisition of the separate parcels of land our radar,” Cuneo says. In fact, a different factory managers praise their employees’ needed to assemble the megasite. Mississippi site suggested by state officials work ethic. “I left impressed by the work- An automotive plant would provide was on his list of potential sites, he says. It ers,” he says. the Tupelo area the greatest employment was a call from former TVA executive “When I went back to New York, I benefits. PUL’s board made attracting an

74 | Summer 2007 | Southern Business & Development North Mississippi automaker one the alliances first objective. While other U.S. manufacturers were Tenn-Tom Waterway Offers a slashing their job rolls, automotive manu- facturing employment was growing, fueled Unique Advantage for North Mississippi by foreign automakers building assembly plants in the U.S., especially in the The Tennessee-Tombigbee Waterway, a 232-mile channel connecting the Tennessee Southern Auto Corridor (www.Southern- and Tombigbee rivers, is another unique advantage for manufacturers looking to locate AutoCorridor.com). in North Mississippi. Completed in 1984 and opened to commerce traffic in January of Besides it own labor needs, an assem- 1985, the Tenn-Tom links up with the Tennessee River in the northeast corner of bly plant brings with it suppliers whose Mississippi near Iuka and connects to the Tombigbee River in west-central Alabama near factories and distribution centers create Demopolis. The linkage of the two rivers essentially provides a direct route from North more jobs. The figures suggest that for each Mississippi to the major seaport in Mobile, Ala. Without the waterway's linkage to the job created in an auto plant seven more jobs two rivers, barge traffic in much of North Mississippi -- specifically the eastern half -- are generated by all the businesses needed would be non-existent. to support a car plant. PUL’s first job was to find and devel- One automotive-related sector that has discovered the Tenn-Tom recently is steel op an industrial site that could attract an manufacturing. Three massive steel plants, two of which will produce automotive-grade automaker. If the alliance failed to secure steel for domestic and foreign automakers making vehicles in the Southern Auto Corridor an assembly plant, the plan was to market and elsewhere, have located on or within the Tenn-Tom Waterway's river system. All three the site for use by a number of industrial plants -- SeverCorr in Columbus, Miss., IPSCO in Mobile County, Ala., and the recently tenants who would bring jobs to the area. announced $3.7 billion (that's with a "B") ThyssenKrupp's facility north of Mobile, plan Early in 2002, PUL’s site search to, or, in the case of IPSCO, are using the Tenn-Tom Waterway to transport steel prod- began. After the Mississippi Development ucts. Currently, about seven percent of principal commodities shipped on the waterway Authority (MDA) and TVA evaluated the are steel products. Soon, that percentage will increase dramatically. The top two com- potential sites, the Tupeo tract was chosen modities being shipped on the Tenn-Tom, according to the Tenn-Tom Waterway's Web site for initial development engineering. The (www.TennTom.org), are forestry products (44 percent) and coal (27 percent). land is in Blue Springs, Miss., a small town

Southern Business & Development | Summer 2007 | 75 North Mississippi reason to think Wellspring was a strong contender. Golden Triangle Region: At a meeting on September 15, 2006, Kelley told PUL members that each county Almost $3 Billion Invested Since 2003 would have to provide $10 million to cover the anticipated $30 million it would cost to Historically, the Tupelo area is well known for its economic development prowess. acquire the 22 properties. Otherwise, the In fact, the area's success at attracting manufacturers goes back more than 50 years alliance risked losing the site. and is legendary in economic development circles, particularly for an area the size of the All 15 supervisors of the three coun- Tupelo metro. Landing Toyota's latest U.S. plant simply takes the Tupelo legend to much ties were at that meeting; they would have to vote on the bond issues to raise the greater heights. money if the members voted to exercise the But just south of Tupelo is a region called the Golden Triangle. It is named that options. Kelley was able to tell them there because the three primary markets that make up the region -- Columbus, Starkville and was contact with an interested prospect, but West Point -- form a triangle that can easily be seen on any map of the state of he couldn’t say who the prospect was. Mississippi. At this time, he said, “We have to buy Landing major manufacturing facilities is occurring with regularity throughout the land, or fold our tents.” The vote approving the $30 million of debt was North Mississippi. Yet since 2003, the Golden Triangle, particularly Lowndes County, unanimous. Four banks provided bridge where Columbus is located, has been on a industrial recruitment roll not seen in the area financing until the bond issue was final- in years. In fact, almost $3 billion has been invested by new and existing business in the ized, and Kelley began asking owners to Triangle, $2 billion of that in Lowndes County alone. renew their options, to give PUL more The region does have one distinct advantage. Mississippi State University is locat- time. Failing that, he said he’d exercise the ed in Starkville and is a huge asset to the area. Mississippi State is the home of the option and buy their land. Some owners Center for Advanced Vehicular Systems (CAVS). Cavs is an interdisciplinary center. It pro- agreed to renew their options. Some didn’t. vides engineering, research, development, and technology transfer teams focused on When Kelley had to buy a parcel, he accomplished it as a purchase agreement complex problems, such as those encountered in technologies designed to improve that conserved PUL’s cash. PUL paid 20 human mobility. In short, the mission of CAVS is to develop the people, concepts and percent of the sales price when the sale knowledge for future transportation and manufacturing needs. closed, and was obliged to pay 85 percent The Triangle region is also home to PACCAR, SeverCorr and Navistar and will be a of the price 15 months later. So, an owner huge player in North Mississippi as the automotive and auto-related industries continue received 105 percent of the sale price, com- to grow in the region. pensation for waiting 15 months for the bulk of the money. In the midst of that effort, the first pos- itive development occurred. In early near Tupelo. The development engineering five years, before targeting other tenants. November, PUL received a request for a work was completed in February 2004, As 2005 ended without any serious memorandum of intent. The MOI is a doc- thanks to a $250,000 MDA grant. interest from an automaker, Randy Kelley ument spelling out in detail everything the Meanwhile, in November 2003, started thinking about the options, which company is being offered for building its Randy Kelley and some staff members would begin expiring in eleven months. He plant at a particular site, such as tax and started visiting owners of the 22 parcels considered what PUL should do to ensure cash incentives and site improvements it needed to assemble the megasite. They its continued control of the megasite for as will be given. “It’s not a negotiating explained to the owners what PUL was long as it took to attract a tenant. process,” Kelly says. You have to spell out doing and why a major industrial employer The best answer was to buy the land, your best offer in the MOI. The attorneys could ensure the area’s future prosperity. Kelley decided. The PUL board hoped they who requested the MOI didn’t say it was Most of the owners signed option agree- could convince the state legislature to for Toyota, but from all the visits Toyota ments giving PUL the right to buy their authorize the money needed for the acqui- had made to the site, it was obvious that land within three years of the date the sition. In January 2006, PUL asked Wellspring was on a short list of sites being option was signed. The first one was signed Mississippi lawmakers to authorize the considered. “I felt like we were definitely on Nov. 5, 2003. money, a measure the alliance called “an in the hunt,” Kelley says. In May 2004, with all the land under unprecedented new partnership between Completing the MOI kept Rumbarger option, the site was submitted for certifica- local and state governments.” The House and Kelley and their staff and MDA execu- tion as a TVA megasite, and the designation approved the proposal, but the Senate tive director Gray Swoope and his staffers came in January 2005. At that time it was balked, and as summer ended nothing had busy through most of November. “Anyone the third megasite in TVA’s seven state been done. And Kelley couldn’t wait any who thinks state employees don’t work region. Rumbarger was ready to introduce longer. After Cuneo’s July visit, Toyota ought to work with the MDA people,” it to the auto industry at the Automotive sent people to visit the site a number times Kelley says. He found them in the office at World Congress in Barcelona, Spain, in in the summer and fall of 2006. nights and weekends, and always available May 2005. By then PUL had decided to Kelley, Rumbarger and the few other to provide information. market it as “The Wellspring Project,” and local people who knew about the visits After the MOI was submitted in early pursue an auto assembly plant for the next were sworn to secrecy. And they had no December, there was an anxious lull. Then

76 | Summer 2007 | Southern Business & Development North Mississippi Everyone worked through Christmas and Sites Abound in North Mississippi New Year’s to complete the document that would become a binding agreement when it for the Automotive Industry was signed. By then Toyota was considering which There are several transportation corridors in North Mississippi that are crucial to of the three finalists to choose: Tupelo, companies setting up shop in North Mississippi as the automotive industry grows in the Marion, Ark., or Chattanooga, Tenn. For a region over the next five years. Highway 78, or Future Interstate 22, which runs from while, Chattanooga and Marion were men- Memphis to Birmingham, will be a center of activity. And U.S. Highway 45, as it runs from tioned in the press, but Tupelo was still a Corinth in the northeast portion of North Mississippi all the way down to the Golden close secret. Triangle Region of Columbus, Starkville and West Point, will see a tremendous amount of On January 18, Toyota raised an activity as well for Toyota suppliers and suppliers to PACCAR and SeverCorr. alarming issue about mineral rights. “This looked like a deal killer,” Rumbarger Other notable corridors in North Mississippi that feature plenty of suitable sites for recalls. Toyota had experienced trouble the prospective automotive industry include Interstate 55, which runs from Memphis to with old mineral rights on a property in Jackson, Miss., U.S. Highway 61 that is the primary north-south transportation corridor another state, and wanted to be certain it in the Mississippi Delta, U.S. Highway 278, and U.S. Highway 72, which skirts the bor- wouldn’t have to contend with the 80-some der with Tennessee. year mineral rights on some of the Throughout the northern region of the state of Mississippi, excellent sites, both pre- Wellspring land. pared and greenfield, are available to those who are plan to serve Toyota, PACCAR, While the Tupelo area has no oil, nat- ural gas or mineral production, after the Navistar, SeverCorr and other auto and automotive-related industries. turn of the last century, some partial miner- al rights were sold on to some of the land. Finding the current owners, and getting three days before Christmas, a request for a Complete confidentiality was demand- them to extinguish their rights would entail memorandum of understanding arrived ed, and despite all the people that were considerable time and expense. Under from Toyota. involved in this project, there wasn’t a leak. Mississippi law the rights remain in effect,

Toyota OEM plant

STARKVILLE Mercedes OEM plant

Nissan OEM plant

Southern Business & Development | Summer 2007 | 77 North Mississippi PACCAR Begins Construction in Columbus

Truck engine manufacturer PAC- CAR Inc., broke ground on its new manufacturing plant July 17 in Columbus, Miss. At the groundbreak- ing ceremony, PACCAR also announced that it will make a $2 mil- lion contribution to Mississippi State University's capital campaign for the College of Engineering. "PACCAR is impressed by the world-class educa- tional opportunities in Mississippi," said the company's CEO, Mark Pigott. The 420,000-square-foot engine plant and technology center will be built on 400 acres at the Lowndes County Crossroads Megasite. "This leading-edge facility will enhance PACCAR's integration of technology in design, engineering, and manufactur- ing," said Pigott. "It is our goal that this facility will be the most techno- Pictured are leaders of the Mississippi team that brought Toyota to the Magnolia State. logically advanced and environmental- (L to R), Randy Kelley, Gov. Haley Barbour, Gray Swoope and David Rumbarger. ly friendly commercial vehicle diesel engine facility in North America." and pass on to heirs, remaining in effect mitigated. Again, the governor came with The 12.9-liter and 9.2-liter until they’re terminated. (In other states, something to satisfy the automaker and that engines produced at the Mississippi mineral rights expire, if they aren’t exer- would please environmentalists. A 120- plant will be PACCAR's most fuel-effi- cised in a certain number of years.) acre park with a bird habitat would be cre- It looked as if Wellspring was going ated on the former wetlands. cient and highest-technology diesel lose in the final round. Kelley says he and Kelley was able to satisfy Toyota’s engines, according to the company's Rumbarger were “two sad puppies” the day desire for a significant buffer zone around executive vice president, Jim Cardillo. Toyota raised the mineral rights problem. the plant site. Working at warp speed, Production at the plant is expected to But the next day, when Gov. Barbour was Kelley collected options on 450 additional begin in 2010. The deal will create told, the former practicing lawyer quickly acres in 18 days. about 500 new jobs with an annual found a solution. The governor told Toyota Rumbarger, Kelley and MDA chief payroll of $18 million. executives that the state of Mississippi Swoope say a whole lot of people made it Based in Bellevue, Washington, would be responsible for terminating all the possible for Mississippi to win the Toyota mineral rights. It would establish a fund to plant. “This was a total team effort,” PACCAR is ranked 141st by Fortune do that. It would track down all the owners Swoope says. And Gov. Barbour’s involve- magazine and seventh in the motor that could be found and buy their old rights. ment made the difference. “Without Gov. vehicle and parts sector. It had a And money would remain in the fund to Barbour,” Rumbarger says, “we wouldn’t record of $1.5 billion in cover the cost of buying rights from owners have succeeded. He removed every imped- 2006. who might come forward later. That satis- iment and made assurances on certain fied Toyota. incentives that were in question. Toyota Gov. Barbour also solved Toyota’s trusted him to deliver on all his promises. 341,000 square foot plant, creating 500 concerns that clear-cutting trees on the site Cuneo, who’s retired from his Toyota jobs, in nearby Itawamba County. And would sully the automaker’s reputation as position and returned to his Washington Toyota Auto Body (TAB) will invest $200 an environmentally sensitive corporate citi- law firm, says, “Barbour is unbelievable. million in a plant that will be located in the zen. He pledged to declare a statewide He follows up on everything.” Harry A. Martin Industrial Complex in “Toyota Arbor Day” when school children So far the Tupelo area has commit- Baldwyn, Miss. The TAB facility will would plant 500,000 trees. ments from two major Toyota suppliers: house about 400 workers and will provide Toyota also was worried about the seat, door-panel and carpet supplier Toyota Toyota with stamped parts, body weld parts patch of wetlands on the site that had to be Boshoku America said it will build a and plastic parts. �

78 | Summer 2007 | Southern Business & Development